March 24, 2018
/ For decades, buying a house was regarded as the
focal point of the American Dream. However, a number of people have
wondered if buying a house was better than renting one. Recently,
there have been a number of people who have questioned whether or
not it is a good idea to buy a starter home and then buy the ideal
home.

Per Neil
Shekhter , there are individuals who often argue whether
or not buying a home or continuing to rent one. It often depends on
the person's current circumstances. In order to get a better
understanding of this situation, it is important to get the answer
to five important questions that people must ask whenever they are
looking to buy or rent a house. The questions are based on the fact
that an individual has good credit, minimal debt, a stable income
and also who has savings for a down payment and is otherwise in
position to afford a home.

1. How long are you
planning to stay at your current home?

When looking to determine whether or not you should buy or rent a
home, the length of time you plan to stay is what you need to
consider. Buying and selling a home will require a number of costs
such as title insurance, agent/broker fees, appraisal fees and also
an origination fee for a mortgage. The longer you stay at a
particular house, the more you can spread out the costs. Home
appreciation can offset any additional costs that you may occur.
Therefore, it is a good idea to stay in the home for more than
three years so that you can pay down the mortgage debt and use the
appreciation to build equity, Neil Shekhter points out.

2. Does the Price of
Housing Always Go Up?

Prior to the real estate market collapsing at the end of 2007,
there were many people who believed that home prices would always
go up and appreciate. However, this has proven to always be the
case. When the housing bubble burst in 2008, a number of houses
went down in value and put many homeowners underwater in their
mortgage. With a significant drop in home values, many people
experienced a considerable amount of financial distress. Therefore,
when you are looking to buy a house, consider your financial
situation and how it would be if your house went up in value by a
very small amount or if it wouldn't go up in value at all. Another
thing to keep in mind is that if you rely on your home for
retirement savings, you can be at greater risk than if you put your
savings in a diversified investment portfolio of stocks and bonds,
according to Neil Shekhter, founder, and CEO of Santa
Monica-based NMS
Properties.

3. Are You Throwing Money
Away When You Rent a Home?

One of the most common questions that people ask when looking to
live in a house is if renting will result in wasting money. When
you own a home, you will build equity which
can give you a significant gain over time. They also believe that
you will increase your net worth with home ownership while renting
just results in spending money. However, there are a number of
hidden costs associated with home ownership. Along with the monthly
mortgage, you will need to pay for property taxes, homeowner's
insurance and maintenance. You may also need to replace things such
as the heating system or the roof. Therefore, it is a good idea to
evaluate the costs of ownership in comparison to renting.

4. How Much Money Will You
Save on Taxes?

A number of buyers of real estate often assume that the
appreciation of the home and the equity will offset any of the
costs associated with owning a home. They will also believe that
the mortgage interest deduction will also save them money as well.
Since the median home price is $200,000 in the United States, and
the mortgage interest rate at 5%, the interest deduction will
likely be less than the standard deduction of $12,600. Therefore it
is likely that a homeowner will not save any money when claiming
the home mortgage interest deduction nor will they save money on
their taxes.

5. Are You Making a
Legitimate Comparison of Your Housing Options?

It is important to make an accurate comparison between the cost of
homeownership and renting when looking to live in a house. You will
also need to know how long you plan to live in the house as well.
Instead of focusing on the monthly and annual costs
of buying or renting,
it is better to focus on the impact either one will have on your
future long term wealth. At times renting a home may actually give
you more funds to invest and product financial liquidity. Whenever
you are looking to buy or rent, it is important to evaluate and
decide on which particular property will meet your needs both
financially and in terms of your standard of living, Neil Shekhter notes.

Launching NMS Properties in 1988, Neil
Shekhterassumed the
role of CEO in January 1995. The real estate management company
focuses on multi-family and mixed-use properties in the Greater Los
Angeles area and in Santa Monica. At present, NMS properties manage
more than 70 properties.

Over the course of 2017, NMS deployed 40 furnished units in Los
Angeles, and Neil
Shekhter plans to increase that number in 2018. The
company currently manages some of its properties while testing a
pilot with MY
SUITE.